Adding Information To Your Credit Report

Do you get an annual credit report from a credit bureau

? If you do then you are most likely aware that you are entitled to a free copy once every 12 months. When the credit report scheme started in the 1830s, nobody but lenders and merchants were allowed access to these reports. It was only a little later that they conceded that it is inefficient for businesses to not have access on these reports and are thereby, risking too much by not knowing if their consumers are creditworthy.

Now, consumer credit report can be accessed by creditors, landlords, businesses and the like yet the system still has efficiencies. A credit report is prepared by credit reporting agencies (CRAs). These CRAs are in correspondence with creditors who supply the information to them based on customers' application forms and consumer behavior. If you have applied for a credit card, you would be giving away some information about yourself. One you use your credit card, every transaction is recorded by the credit car company. Both of this information is reported to the credit bureaus.

However, some small companies may only report to one of the three major credit bureaus: Experian, TransUnion or Equifax. Others like travel agencies, entertainment businesses, gasoline card companies, local retailers and credit unions may not report your transaction with them at all. This makes only one copy of credit report correct while the rest contain inaccurate or lacking information. This may negatively affect your payment history as part of your consumer behavior. Your payment history comprises 35% of the total of your credit score computation. You cannot risk having inaccuracy on that part.

You may find yourself being denied of a credit due to "insufficient credit file" or "no credit file." This means that you may have accounts in your annual credit report that do not appear on your creditor's file. You can ask the CRA to include the information to future reports. This will update your file for your next credit application and will more likely yield a better credit score.

Some CRAs will ask for a fee to correct update the copy of credit report that contains insufficient information. They are not required to do so but they may as long as the information is verifiable. Creditors should, however, report to the CRA on a regular basis so your file can get updated. Otherwise, your file will only get updated if you noticed that it is outdated and you ask them to update it. It will not be the CRA's fault if your creditors do not report regularly for updates.

by: Leo Chu

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